• Jean-Jacques Laffont prize 2011: Robert Townsend

    townsend_r

    This week the prize will be awarded to Robert Townsend, from MIT, by the city of Toulouse in partnership with the Institut d’Economie Industrielle (IDEI) (see official annoucement). It is hard to think of any other economist with such an impact both on theory and applied work in the field of development. Think of course of his clasical work on costly state verification, insurance, and more recently on financial development. I also quite like this recent piece on the geographic concentration of enterprise in Thailand.

    Professor Townsend began his work as a theorist working on general equilibrium models, contract theory, and mechanism design. He is known for his seminal work on costly state verification, the revelation principle, optimal multi-period contracts, the decentralization of economies with private information, models of money with spatially separated agents, and forecasting the forecasts of others. Townsend’s recent work focuses on analyzing the role and contributions of financial systems on developing economies by studying applied dynamic general equilibrium models and contract theory.

    On a personal note, I first met Robert Townsend in an Inter-American Bank project conference in Colombia in 1997. At the time, I was a government advisor in Paraguay, where I had been living for almost 10 years, and together with a couple of Paraguayan colleagues, we had won an Inter-American Bank research contest of the so-called Latin American and Caribbean Research Network, which provided us with funding to write a paper on “willingness to repay in financial markets in Paraguay“. I remember sitting in the Bogotá meeting and listening to these academics, which I had barely been doing for the past decades, and, despite the fact that I was not understanding most of what they were saying, suddenly getting convinced that I wanted to come back to the developed world and do a PhD to get better intellectual tools to address the issues I was struggling with in my daily work at the planning ministry or as a consultant. Conversations with Robert Townsend, as well as Marco Pagano, were then decisive in making this initial hunch a firm undertaking. Subsequently, I came to Toulouse and was privileged enough to work with Jean-Jacques Laffont onto my PhD. So of course, the occasion of this prize has a special flavor for me.

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  • Minimum wages and big push

    Nica Inside Maquila

    Seen today in the development seminar at TSE, this interesting paper by Jeremy Magruder on the effect of a minimum wages induced increase in demand on formal employment in Indonesia:

    Big Push models suggest that local product demand can create multiple labor market equilibria: one featuring high wages, formalization, and high demand and one with low wages, informality, and low demand. I demonstrate that minimum wages may coordinate development at the high wage equilibrium. Using data from 1990s Indonesia, where minimum wages increased in a varied way, I develop a difference in spatial differences estimator which weakens the common trend assumption of difference in differences. Estimation reveals strong trends in support of a big push: formal employment increases and informal employment decreases in response to the minimum wage. Local product demand also increases, and this formalization occurs only in the non-tradable, industrializable industries suggested by the model (while employment in tradable and non-industrializable industries also conforms to model predictions).

    It would be nice to get additional evidence on the effect of other demand shocks, such as the large scale conditional cash transfer programs that were implemented in Mexico or Brazil, on industrialization.

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  • Partisan grading

    grades

    Intriguing findings by Talia Bar and Asaf Zussman, coming up in the American Economic Journal: Applied Economics, Vol. 4, Issue 1, January 2012.

    We study grading outcomes associated with professors in an elite university in the United States who were identified—using voter registration records from the county where the university is located—as either Republicans or Democrats. The evidence suggests that student grades are linked to the political orientation of professors. Relative to their Democratic colleagues, Republican professors are associated with a less egalitarian distribution of grades and with lower grades awarded to black students relative to whites.

    Here is a link to the full paper.

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  • Circulaire Guéant: suite

    30000 signatures recueillies à ce jour (voir le site).

    “Aujourd’hui, le gouvernement a sorti un communiqué de presse donnant quelques axes de la nouvelle circulaire. Rien n’indique à ce stade que la situation va réellement s’améliorer pour les diplômés étrangers.

    D’abord, parce qu’il minimise la gravité de la situation en parlant de «malentendus», ce qui est offensant pour ces diplômés qui sont aujourd’hui confrontés à des ordres de quitter le territoire – un « malentendu » ?

    Ensuite parce qu’il continue à mettre en avant des critères subjectifs qui livrent les diplômés étrangers à l’arbitraire des services administratifs.

    Enfin, quelle que soit la nouvelle circulaire, il faudra observer très concrètement si la situation des diplômés étrangers devient enfin digne de notre pays. Nous devons donc franchir une étape supplémentaire.

    Comme nous l’avons annoncé dans l’appel, notre action ne se limite pas à un clic. Nous nous sommes engagés à parrainer des diplômés étrangers en difficulté. Pour rendre ces parrainages publics, nous avons décidé d’organiser, avec le Collectif du 31 mai, une séance publique le mardi 10 janvier au cours de laquelle nous ferons intervenir une dizaine de duos parrain/filleul.

    Chaque filleul exposera son parcours et les difficultés auxquelles il est confronté, et le parrain évoquera les raisons de son soutien.

    Parmi les parrains présents on compte Albert Fert (prix Nobel de physique), Vincent Berger (président de l’université Paris 7), Patrice Brun (président de l’université Bordeaux 3), Caroline Fourest (éditorialiste), Caroline Huppert (réalisatrice), Tonie Marshall (réalisatrice)…

    Dès la semaine prochaine nous publierons sur notre site les parrainages accompagnés des témoignages.

    Avec nos remerciements pour votre soutien aux diplômés étrangers

    Jean-Pierre Mignard

    Bertrand Monthubert

    Fabienne Servan-Schreiber”

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  • Incivilité: l’enfer c’est les autres

    foule_by_silva57600

    Selon les résultats des études réalisées dans plusieurs pays par Ipsos Public Affairs (France, Grande Bretagne, Suède, Italie, Etats-Unis et Japon), les incivilités subies dans la vie quotidienne apparaissent comme une des sources de stress majeures au sein de la société française (voir la note):

    “Le « manque de savoir vivre, l’agressivité des gens » sont cités comme la première source de stress en France, en Grande Bretagne ou en Allemagne (cités respectivement par 60%, 59% et 47% des personnes interrogées). C’est la deuxième source de stress aux Etats-Unis (50%). Dans un pays comme la France où la politesse est une valeur plébiscitée par 65% de la population, l’agressivité est particulièrement mal ressentie. Beaucoup y voient une atteinte à une forme d’héritage patrimonial. Surtout, dans un environnement social qu’ils perçoivent de plus en plus comme insécurisant, les Français ont la nostalgie d’une société où les gens se parlaient davantage et respectaient des codes de savoir vivre désormais en déclin.”

    Voir à ce sujet cet article du Monde, et le site de la RATP Cher Voisin de Transport. En tant que cycliste, j’attends avec impatience l’équivalent pour les usagers quotidiens de la route.

    Un constat déjà présent dans le dernier rapport du Médiateur de la République Jean-Paul Delevoye, qui parlait de burn-out de la société française:

    “Le burn-out de la société française trahit un besoin urgent de bâtir de nouvelles espérances à la hauteur des efforts fournis. La fébrilité du législateur trahit l’illusion de remplacer par la loi le recul des responsabilités individuelles et de la morale. Le maintien sous perfusion de citoyens assistés permet de soulager nos consciences, mais pas de résoudre nos problèmes.”

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  • Odious debt in Ecuador

    cayambe_volcano_ecuador_photo

    The following documentary, notwithstanding some simplifications, has an interesting, mostly factual, part on odious debt. The general description starts around 33:00, and the most interesting part on the Ecuadorian process that led to the 2000 debt restructuring, starts around 41:50 (with French, Spanish or English subtitles, quite handy…). It’s actually surprising how little publicity this story got.

    For the sake of balance, Here is the completely dissenting view on odious debt and the Ecuadorian default, by Felix Salmon at Reuters! He also reflects on the latest consequences for the country in terms of dependence on China’s loans.

    Finally, for those interested in a bit of theory, here is the Seema Jayachandran and Michael Kremer’s paper (American Economic Review 96:1 (March 2006): 86-42), which lays down guidelines to allow for debt repudiation in some circumstances.

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